Rental Fraud Scam Alert

By Tiffany Ross- Consumer Resource Officer & Bruce Rinne- Information Officer

            The North Carolina Real Estate Commission has been receiving an increasing number of calls and emails about fraudulent rental ads attempting to scam innocent people out of their security deposits or application fees. These scam artists can be located anywhere in the world, yet claim they are local property owners. Here is information about rental scams and the Red Flags to alert you of a potential scam.

How You Can Avoid a Rental Scam

            Many rental scams take place on social media.  For example, a fake owner or fake property manager posts on Facebook, Craigslist, Twitter or other social media outlets.  The posts look legitimate and may even have actual pictures of the real property they are claiming to be renting.  In reality, the scammer has no connection to the property or right to advertise it, but the ad will ask for upfront payments to even view the property, or first month’s rent or a security deposit in advance.  They may promise the money will be held in a trust account, and the destination appears to be legitimate, but it really goes to a scammer who is never heard from again.  Being aware of this scam and not falling for these tactics can prevent the loss of hundreds or even thousands of dollars.

Action You Can Take:

1. Never send money to someone online or electronically without verifying it is going to a legitimate place.  Do your research and independently contact and verify that the person who will be holding any money is a real attorney, licensed real estate broker, or the true property owner.
2. Be skeptical of anyone asking for money upfront just to view a rental property.  Make sure that you are communicating with the actual property owner or a licensed real estate broker.  You can look the property owner up in public records for your county (typically through the tax department) and make sure you verify the identity of the person and their contact information.  You can verify someone is a licensed real estate broker by searching the licensee look up page.   From this page, you can verify that their email and other contact information matches the advertisement.
3. Avoid handling any rental transactions over the phone, email or by the internet, including social media.  Make sure that you meet in-person with the owner or their real estate broker, as well as make a physical inspection of the property.  Do not send any money until you have verified that the people and place are legitimate. You can ask to see the broker’s “pocket card” that shows they are a broker, and their driver license.
4. Search legitimate websites, like realtor.com, or actual property management company’s websites for true rental listings by licensed real estate professionals.
5. Search images on the Internet of the owner and broker, and see if they match the person you are dealing with.
6. Look for the Red Flags below and beware of these tactics.

Red Flags That You May Be Dealing With a Scammer

1. They don’t want to meet you in person.
2. The listing has typos or poor grammar.
3. The price is too good to be true.
4. They want you to move in immediately, without even seeing the property.
5. They ask for rent, a security deposit, or other up-front money before signing a lease.
6. There is no screening process.

What To Do If You Are Already a Victim Of a Rental Fraud Scam

            If you have already responded to a fake ad and sent money, only to never hear from the scammer again, you can contact the North Carolina Attorney General’s office to notify them of the scam and provide as much information as you can.  You can also contact local law enforcement (sheriff or police) and submit an internet crime complaint to the FBI to report the scam and see if there is any chance of recovery.

How You Can Protect Your Clients

            If you work in sales and have clients that need to rent before purchasing a home, educate them on these dangers and assist them by looking up properties listed in the MLS or refer them to legitimate property management company websites in your area.  Provide information like this article to help them to avoid the scams and traps, and assist them with verifying property owners through a public records search.  Stay in contact with them, and make sure they are aware of NC Landlord and Tenant laws. They can contact the Commission’s Regulatory Affairs Division at (919) 719-9180 if they have questions or concerns about the actions of a licensed property manager. Or, they can contact the Attorney General’s office (877-566-7226) if they have concerns about the actions of an unlicensed property owner, managing their own property, or other unlicensed property management activity.